Road funding's fate now in voters' hands

Voters next year will decide whether to spend $1 billion or maybe more annually from the state's reserve funds on Texas roads after lawmakers late Monday determined the specifics of how they'll dole out the money.

"Everything we have in here is a good plan," said Rep. Joe Pickett, D-El Paso, the proposal's lead author in the House. "It's now up to us to educate everybody between now and next year to let them know what to expect and what this means."

The compromise plan, approved by both chambers, splits revenues from oil and gas production between transportation spending and the state's economic stabilization fund, known as the rainy day fund, which now receives all of the money. Based on estimates revised late last week, the split would net the Texas Department of Transportation about $1.2 billion, Pickett said.

The approval ends seven months of near-daily legislative session time in Austin, as transportation funding was the last unresolved item in what was the third special session.

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Because the money means a change in constitutionally-protected reserve funds, however, the money isn't guaranteed. Voters must approve the plan in November 2014. Waiting more than a year for the ballot measure separates the road funding from a plan to spend $2 billion in reserves to improve the state's water infrastructure.

Passing the transportation bond might be challenging, said Texas Association of Business President Bill Hammond.

"It will require a concerted effort on the part of the business and chamber community in Texas and other forward-looking organizations to make the case to the voters that this is something that absolutely needs to be done," Hammond said.

He said there are "people who are against anything and everything and they typically show up at every bond election and proposition of this type."

Oversight of fund

Clearing the Legislature alone is a major step forward for road funding. Division over the plan arose during the past month because lawmakers demanded guarantees that the shift wouldn't deplete the reserve fund. Senators installed a $6 billion cap, which House legislators fought. Pickett, one of the negotiators between the two chambers, then suggested the state's legislative budget board determine annually how much the stabilization fund should hold, based on financial outlooks at that time, and adjust the transportation spending. House members again balked at the idea.

Monday, Pickett floated another method: The House speaker and lieutenant governor each appoint five members of their chamber to a group who will recommend how the money is divided, should revenues falter. Once they suggest what the rainy day fund should have, legislators then can amend the plan, within a host of rules meant to keep lawmakers from bogging down the transfer.

In addition to the 10-member board overseeing the rainy day fund spending, lawmakers also approved creating a committee to explore other ways to fund transportation and distribute the money to non-toll projects statewide.

The plan certainly doesn't give transportation officials what they estimate they need. The state agency estimates $4 billion more is needed annually to repair aging roads and meet anticipated traffic demand.

"This is a stopgap bill, I don't care how we cut it," said Rep. Phil Stephenson, R-Wharton.

Pickett said the compromise, including a requirement that the transportation agency find $100 million in savings from its own budget, satisfies the need to address some of the state's highway spending shortfall. "I didn't get everything I wanted in this," Pickett said. "I don't think anybody got exactly what they wanted."

Burdened budget

Years of paying for projects by borrowing has left the agency with repayments that increasingly consume its budget as repair costs and widening projects go undone.

Already some roads are overburdened. The agency announced last week it was converting from pavement to gravel a dozen rural roads damaged by oil and gas drilling equipment - the same gear used to extract resources that then pay the oil and gas severance tax used to pay for roads.

The gravel plan drew strong criticism from some lawmakers, who used the transportation debate to condemn it. "I think the timing was particularly bad," Nichols said.